Oil Prices Edge Higher as Weak Dollar Drives Demand
Oil prices ended the week higher in the global commodity market, supported by a weaker US dollar, signs of strong US fuel demand, and fresh geopolitical tensions, despite pressure earlier in the week due to rising US inventories and trade concerns.
The international benchmark Brent crude was trading at $68.61 per barrel on Friday, marking a rise of around 1.01% compared to last week’s closing price of $67.92. Similarly, the American benchmark West Texas Intermediate (WTI) traded at $66.19 per barrel, up approximately 0.8% from last Friday’s close of $65.65.
Oil markets initially came under pressure early in the week after the OPEC+ alliance announced a larger-than-expected production increase of 548,000 barrels per day for August, stoking fears of oversupply.
At the same time, fresh trade tensions emerged as US President Donald Trump threatened new and higher tariffs on several countries starting August 1, weighing on demand expectations. Midweek, prices slipped further following a 7.1 million barrel increase in US crude inventories reported by the American Petroleum Institute, against market expectations of a draw.
The build came despite strong travel activity over the July 4 holiday, signaling weaker-than-anticipated underlying demand.
However, oil prices regained ground as the week progressed. Support came from the US Energy Information Administration reporting a 2.7 million barrel drop in gasoline inventories, reflecting robust fuel consumption during the holiday period.
A weaker US dollar also lifted prices by making oil cheaper for buyers using other currencies.
Additional momentum came from renewed expectations of US monetary policy easing. Minutes from the Federal Reserve’s (Fed) recent meeting showed several policymakers favoring rate cuts this year, while President Trump reiterated calls for lower interest rates. Lower rates typically weaken the dollar and boost commodity demand.
On Friday, oil prices edged higher after Trump announced he would make a major statement on Russia next week, raising the prospect of new sanctions against a key oil producer.
Comments from Fed officials further supported sentiment, as some signaled openness to rate cuts as early as this month.
Despite these gains, investors remained cautious over Trump’s tariff plans, including proposed blanket tariffs of up to 20% on most trading partners and a 35% tariff on Canadian goods starting August 1.
Analysts warn that rising tariffs could undermine global economic growth, dampen industrial activity, and curb oil demand.
Overall, oil prices managed to post a weekly increase, driven by a combination of geopolitical risk, positive US demand data, and a softer dollar, even as concerns about oversupply and trade tensions capped stronger gains.
OPEC
Oil is expected to remain the leading energy source in the global mix by 2050, accounting for a 29.8% share, according to the Organization of the Petroleum Exporting Countries (OPEC). The group’s latest medium and long-term outlook report titled World Oil Outlook 2050, covers the period from 2024 to 2050.
The report highlights that rising population, economic growth, shifts in energy policies, and technological advancements continue to drive a rapid increase in global energy demand. Last year, nearly 600 gigawatts (GW) of new renewable energy capacity were added globally, a record high.
However, this surge in renewables has not fully met the growing energy demand, resulting in record-high consumption of traditional energy sources such as oil, natural gas, coal, and nuclear power.
Towards the end of the forecast period, slowing global population growth and economic expansion, along with improvements in energy efficiency, are expected to slow the growth rate of primary energy demand. This slowdown will largely be driven by an increased share of renewable energy sources.
Global primary energy demand is projected to rise by approximately 23% by 2050 compared to last year, reaching 378 million barrels of oil equivalent per day (boepd). This growth, averaging 0.8% annually, will come almost entirely from non-OECD countries, while demand in OECD nations is expected to remain flat or decline, OPEC said.
During the outlook period, demand for all primary energy sources except coal is expected to grow. Renewable energy demand is projected to increase by 52 million boepd, reaching around 99.4 million boepd. This growth will be largely driven by policy support and declining production costs for renewables such as wind and solar power, OPEC said.
Demand for nuclear energy will regain momentum, increasing by 10 million boepd to reach 24.9 million boepd by 2050. Driven by the need for reliable and affordable energy, demand for oil and natural gas will also continue to rise.
Oil demand is forecast to increase by 18.2 million boepd, reaching 112.4 million boepd, while natural gas demand will grow by 19.7 million boepd to 89.7 million boepd. Coal demand, however, is expected to decline due to energy and climate policies and the rise of other sources.
It is projected to decrease by 30.4 million boepd, falling to 51.4 million boepd, making coal the only primary fuel to see a decline in demand. According to the report, oil and natural gas will continue to hold more than half of the global energy mix throughout the forecast period.
By 2050, oil is expected to hold the largest share at 29.8%, followed by renewables, including hydropower and biomass, at a combined 26.3%. Natural gas will rank third with a 23.7% share, while coal and nuclear energy will account for 13.6% and 6.6%, respectively. #Oil Prices Edge Higher as Weak Dollar Drives Demand Lekki Deep Sea Port Handles 20% of Projected Cargo
